In the prior art, analysts study the financial aspects of business entities and rate securities of the business entities based on their evaluations. For example, analysts may rate the publicly traded securities and private-placement securities of long-term debt, medium-term notes, commercial paper, bank loans, and preferred stock. The ratings are generally defined as a progressive series of discrete classifications. For example, publicly traded debt securities may be rated in accordance with various levels in an investment grade classification or various levels in a junk or high-yield security classification.
With limited resources the analysts attempt to rate accurately the debt securities of numerous business entities, which may be located in the U.S. or overseas. Further, even if adequate resources are available to promptly evaluate the performance of the underlying business entity or its securities, the analysts may want to make sure that temporary or evanescent market conditions are not improperly influencing a rating or a level of a security (e.g., debt security). One or more analyst recommendations and credit ratings may lag actual market conditions because of the limited resources of the analysts or for other reasons. As a result, the variable credit characterizations of debt securities may not be as accurate as they might otherwise be.
In reliance upon such out-of-date or inaccurate analysis, a party to a financial transaction may make decisions that do not reflect true current market conditions or risks in purchasing or selling a particular financial instrument (e.g., debt security). For example, the party may incur vague financial risks as the party approaches or reaches an estimated full credit limit of the counterparty because of uncertainty in the credit capacity of the counterparty. Accordingly, a party, an underwriter of securities or an investment banker may not be able to use the full credit limit of the counterparty in decisions to enter into financial transactions, to hold financial instruments, or to enter into hedging activity. The inability to use the full credit limit of the counterparty may reduce the financial leverage and capital available to corporations, among other things. Thus, a need exists for improving the precision and timeliness of credit evaluations of financial instruments (e.g., debt securities).